Posted by
paige on
September 8, 2010 |
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Summer came and went pretty fast this year and real estate moved pretty slow! July sales were down 54% over 2009 and August showed a drop of 26%. This sets us up for the next cycle to be a buyers market. The phones have started to ring again in the last couple weeks and first time buyers are back. Real estate is a great investment and it appears that buyers are giving their collective heads a shake. Low interest rates, great prices, and a fantastic place to call home are some good reasons for buyers to “make the move”!
Peter Borszcz, a local real estate lawyer, has a great blog. This entry has some questions frequently asked by buyers.
1. Will this contract force me to buy this home?
A contract is a legally enforceable promise. Therefore, you are obliged to carry out its terms if the contract is firm and binding. However, a contract can be “subject to” the performance of other terms (for example, obtaining a mortgage). Most Realtors draft “subject to” conditions to allow Buyers time to find out more about the home they are buying and to ensure they are able to obtain financing to purchase it.
2. What happens if I can’t get financing or I am not happy with my home inspection?
Usually a Realtor has written in these items as “subject conditions”, if so, you will instruct your Realtor that you are “unable to waive or fulfill” you contract. If you are unable to waive or fulfill a subject condition, your obligation to purchase the home will cease.
3. Why do I have to give a deposit to the Realtor? Will I get it back if I back out of the deal?
A deposit is “earnest money” meaning that it signifies to the Seller how serious you are to proceed with the transaction. Your Deposit is not a “down payment”, as your cash in the deal (in addition to your mortgage) will be paid on the Closing Date. Whether a Deposit is returned depends on the factual situation which caused a deal to collapse (see below), however your Realtor cannot simply return your deposit without first complying with the provisions of the Real Estate Act.
4. If I can’t complete on the Completion Date will that be a problem?
The contract provides that “time is of the essence” this means that the strict timelines in the contract are enforceable by the Court. In the event that you fail to complete “on time” you may be liable for damages (money damages) or specific performance (where the court orders you the complete the deal). If you find out that the original dates will simply not work for you, please let your Realtor and Lawyer know so that they can attempt to obtain an extension for you.
5. If I back out the deal after removing my subject conditions, will I just lose my deposit?
Assuming that the Seller has not misrepresented and is able to complete, generally a Buyer cannot simply “walk away” from their deposit. Should a Buyer fail to complete a firm and binding contract, the Buyer may be liable to the Seller for all of the Seller’s damages including: a) loss of profit, b) interest costs, c) marketing costs, and d) legal fees. In many cases, the amount of the Seller’s damages may exceed the deposit. If you are considering this, please call your lawyer immediately.
6. I really like the bedroom light, how do I know this is included with the house?
Generally, all fixtures are included with the sale of the house. Fixtures are those items that are affixed (ie; attached to) the structure and foundation (eg; chandeliers). Sometime, exactly what “is” and “is not” a fixture has to do with the “degree of attachment” and this can be confusing for both buyers and sellers. Given this confusion, sometimes Sellers remove items (ie; wall shelving) when they move out, so if there is something of importance which you want included with the purchase of you home please let your Realtor know.
7. The property has an “in-law suite”, can I rent it out to other people?
A secondary suite can only be rented in the City of Kelowna or the District of West Kelowna where the property has been zoned “S”. If you require that the suite to be rented to afford to live in the property, we strongly recommend that you inquire with the applicable municipality.
8. If I own the property can I do whatever I want with it?
Although an owner can do many things with a property that a tenant cannot do, your ownership may be subject to restrictions that are found in local statutory building schemes, homeowner’s associations, strata councils, and municipal bylaws. If your purchase of the property is dependant on a change in structure (ie; major renovation) or use (ie; home based business) please discuss this with your Realtor.
9. If my spouse goes on title alone and we separate, will I have no claim to my house?
The Family Relations Act creates an interest in land upon the breakup of a marriage, even if there is no interest noted on the land title (subject to a prenuptial agreement or the Act). The Act allows for filing of an interest in land, upon marriage breakup, in the land title office.
10. A clause on my contract (i.e.; title search or tax advice) is “subject to review by the Buyer’s lawyer [or accountant]” what should I do?
Prior to subject removal, you should take the contract to your lawyer or accountant and discuss your proposed purchase with them. Your Realtor has placed this clause into your contract to ensure that you obtain personalized professional advice in a specialized area (such as tax or a title search).
11. What are my closing costs?
Closing cost vary with each transaction. These include Property Transfer Tax, Municipal Property Tax, Strata Documentation and Adjustment Fees (if applicable), Land Title Office Filing Fees, and Legal Fees. We provide all clients with a quote on Legal Fees and an estimate of the other costs you can expect after we receive your contract, to ensure there are no surprises on closing.
By Peter D. Borszcz
As always, if you’re thinking of making a move, please feel free to call me directly at 250-862-6464.
Talk to you soon…
Posted by
paige on
July 29, 2010 |
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2 hours in the office, 2 hours at the beach, 2 hours at the office, 2 hours at the beach…
OK seriously, temperatures in Kelowna have been over 33 degrees celcius for more than a week. There have been a few forest fires… some more serious than others and there have been a whopping 14 sales on Kelowna’s lakeshore since the beginning of June, 2010! That’s amazing when you consider there has been 19 sales in TOTAL since January.
Overall, listings are up and sales are down. This is typically the time when savvy buyers are on the prowl and those looking for high end properties can often benefit the most. First time buyers seem to be completely gone right now with only one sale under $300,000 in the last 5 weeks and investors are just starting to get cranked up again after a month or two long hiatus.
Strategy for buying in this type of market has to be planned out in advance to maximize your dollar’s buying power. Last week I worked with some people who found 5 houses in a neighborhood that they particularly liked. We narrowed it down to #1-5 and made an offer on the first one. It was rejected. Plan A was to move onto number two, but after careful consideration, we decided to wait it out for a few days and let the sellers think we had moved on. Sure enough, a week later we were able to get an accepted offer on house #1 for almost $30,000 below what the last house in that neighborhood sold for… great deal!
Strategy for selling in this type of market also has to be very well thought out. Buyers are elusive and slow moving. In order to even attract a buyer to a point where they would consider making an offer, the price being asked has to be thought of as “exceptional”. Even then, most offers start off low. For those bargain hunting, they’ll usually move on if the low-ball isn’t accepted. For those that have found their “perfect home”, it may take some time, but usually they’ll come to the table and a fair price can be secured.
Thinking of buying or selling? Contact me to find out how my tried and proven strategies can work wonders for you.
Talk to you soon…
Paige
Posted by
paige on
July 7, 2010 |
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Kelowna real estate sales are down again for the 2nd month in a row. In June there were 346 total sales and in May 378. Sale and listing stats up to June 2010 in Kelowna . What does this mean? It means that sellers have to to priced aggressively to attract the wary buyer.
The rush to beat the HST and lower locked in interest rates is over and the next batch of buyers are being very cautious and taking their time. Interestingly, product that has been typically moving quickly and priced under $400K is not moving much at all right now. In June there was 11 homes that sold over $800,000 and 9 of those were over $1,000,000. Haven’t seen those kind of numbers in a while.
Summer has arrived and will no doubt dispell the uncertainty that people are feeling… Kelowna, the best place on earth!
Talk to you soon…
Paige
Posted by
paige on
June 18, 2010 |
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Went to a meeting the other day to listen to a speaker who ALWAYS has a positive take on Kelowna, our growth and our real estate. Rod Gibbings is a local financial planner who has a way of giving the all important reality check when we need it most. Our real estate market is changing and is leaning towards a buyers market again. There has been some press coverage that has painted a negative picture around this most recent shift. Rod started his talk with several pictures of the front page of a Canadian magazine whose titles over the years depicted and predicted doom and gloom in our economy and housing market. Most of these predictions were wrong and in fact, went very far the other way. Check out this revised projection graph from the Organization for Economic Co-operation and Development. Canada by far is the best place in the world!
I’ve heard a lot of predictions being thrown around about Kelowna real estate prices coming down 10% this year. No matter how you look at this, I just don’t see how that can actually happen. The BC Real Estate Council predicts sales to be 3% less than 2009 before climbing 4% in 2011. BCREA also predicts home prices will rise by 6% this year over last and remain static for the most part through 2011. Kelowna has usually done better historically than these predictions that lump BC numbers together. Link to Article.
If you’re thinking of buying or selling, please give me a call on my direct line at 250-862-6464.
Talk to you soon…
Paige
Posted by
paige on
June 10, 2010 |
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The good, the bad, and the ugly have all been in Kelowna’s city chambers recently. Countless house and countless dollars have been spent by government, developers, and taxpayers trying to figure out what to do with the downtown core. Some great things have happened along the way, like using the old Willow Inn for a homeless shelter during the winter and huge numbers of people all talking about what they’d like to see there, but what HASN’T happened is any decision for anything.
Most people agree that something needs to be done. Revitalization will create opportunity for new and unique housing options,better entertainment and restaurants, access to the waterfront and all that goes with it… somewhere that young and old can hang out and feel safe. Granted it’s a big deal… definately not a plan to be taken lightly. There is a lot of real estate we’re talking about and a lot of ideas on what to do, but really, somehow SOMETHING has to happen after all this effort.
Link to Castanet Article
What do you think? Talk to you soon…
Paige
Posted by
paige on
June 2, 2010 |
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The last 18 months has seen a number of my clients turn to real estate for investment purposes. When you’re considering this, there are 2 main points to consider:
1) Are you looking for rental income?
2) Are you looking for capital apreciation?
In Kelowna, if you shop well and take your time to negotiate the right price, you may be lucky enough to get both. With Kelowna’s vacancy rate the highest it’s been in a decade at around 2.5%, it typically hovers close to the 0 or 1% mark… very attractive for landlords. Prices and interest rates are also down. In other words, it’s possible to purchase a property where you can have the vast majority of your costs covered by the rental payment. As a basic rule of thumb, when I’m looking to invest personally, I look to see if my purchase price is covered 100% by the rental payment. For instance, I looked at a property the other day that I would pay $450K for. There are 3 rental units in it collecting $2700 per month. This would cover a mortgage of $450 at 5%. The extra costs, or write off’s, at the end of the year would be insurance, maintenance, and property tax. With the popularity of our market and the continued growth of our city, I believe that over time those write off’s will be offset by a capital appreciation making it all worthwhile.
For those looking at larger investments, most are searching for the elusive 8% cap rate. 5% is a real number right now in Kelowna and those that purchase are also expecting our market to pick up and surpass where it was at the peak in 08, ultimately raising the cap rate closer to the 8%. I recently sold a 5 plex for $850K. This property had a cap rate of slightly less than 5% but had lots of potential to raise that number and lots of investors wanting to snag that rare type of property. At the end of the day, it’s a great plan to have a loan that someone else pays for you leaving you with cash in your jeans.
If you have any questions or are curious about investing in Kelowna real estate, give me a call on my direct line at 250-862-6464.
Talk to you soon…
Paige
Posted by
paige on
May 28, 2010 |
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Real estate in Kelowna can be full of twists and turns and after a rocky period over the last several months has really become quite stable in terms of prices and inventory. However, the last couple of days have been absolutely quiet. This is one of those wierd things that happen from time to time and in chatting with my fellow realtors, they’re finding the same thing… buyers taking more time to decide and very few calls for showings on well priced listings. Hmmm… hope this doesn’t last for long!
On the upside, and pointing to this being just a “glitch”, there have been 204 single family sales in the last 30 days compared to 206 last year same time. Turn that tap back on!
Here’s an interesting article from the Kelowna Daily Courier.
Talk to you soon…
Paige
Posted by
paige on
May 20, 2010 |
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Bob Rennie, the condo king from Vancouver was here the other day to talk about the real estate market in BC. His opinion is that all the underlying factors are here to see continued growth and prosperity for British Columbia and certain more desirable areas like Kelowna, Vancouver Island, and Vancouver. In particular the fact that the whole world saw a lot of our province for the first time during the Olympics is important. Real estate should continue to be a strong and considerable investment when you consider that relatively speaking, Kelowna is considered inexpensive compared to other parts of the world and on the world stage we are only JUST on the radar. Condos in Vancouver are an oversaturated market as it is here. Fortunately for Kelowna though, a lot of the projects that were slated to be underway didn’t break dirt as the market started to feel the economic pinch of the recession we’ve just been through. This means that although there are a number of condos still available and competing with each other, the market for condos is becoming more stable, with those buildings having important ammenities contributing to lifestyle like proximity to shopping and leisure activities are selling first over those that have less that all the necessary fundamentals. CMHC has just released it’s spring housing market for Kelowna and it’s positive!
Talk to you soon…
Paige
Posted by
paige on
May 10, 2010 |
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I had a busy weekend working with 2 couples looking to buy. One of these couples is buying their second home and had a lot of houses they wanted to see in different Kelowna neighborhoods. I had it set up to run smoothly from house to house and neighborhood to neighborhood. The second house we saw was quite amazing. I had a feeling something wasn’t quite right when we drove up. I checked the address… yup, right house. I knocked on the front door, used the lock box, opened the door and said “hello”. The sellers answered back that she was in the bathtub and would be right out. She was very gracious but said she didn’t know there was a showing. Another alarm bell is ringing in my head. No worries she said, she’d just head out and leave us to take our time looking around. While we waited for her to vacate, we went into the back yard. Wow would be a good word to describe it and again I’m thinking something isn’t right. When we started looking through the house I know for sure that something was wrong. The buyers are falling in love and I’m sure it’s not the right house. Sure enough, I spy the feature sheets and the price listed is $100,000 more than their budget allows. How did this happen? I went outside again to check the address and realized that the address of this house and the one 2 doors down that we were supposed to be in had the same numbers just in a slightly different order. Groan… had to go back and tell them that this wasn’t actually the house of their dreams but a mistake on my part and I didn’t real the address correctly. They were very good sports about it and we all had a chuckle. When I called the listing realtor later to explain the situation, she too had a good sense of humor. I hope the sellers see it that way too!
This house was truly amazing and one-of-a-kind… check it out!
Talk to you soon…
Paige
Posted by
paige on
March 19, 2010 |
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There is some incredible lakeshore real estate in Kelowna. I was hiking on Knox Mtn. today and saw this home on Okanagan Lake that’s for sale… check out the link to a multi million dollar home and imagine what it could be like to call this home!
Check out the property.
Talk to you soon…
Paige
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